Professional indemnity insurance for your business.
Professional indemnity insurance
What is professional indemnity insurance?
Professional indemnity insurance (PI), also known as professional liability insurance, covers you for claims where clients have lost money due to mistakes in your professional services. Professional services include any designs, advice, or consultations you carry out for a client. It also covers contract, IP and trademark disputes. Should a third party make a claim against you, a PI policy will cover your legal costs and expenses to defend you as well as compensation awards if the claim is successful.
Is it relevant to me?
Freelancers, contractors or any size of business that provides advice, consultancy or design service should consider this policy. Having PI insurance could even help you win more business as it’s often requested by clients before entering a contract. PI is also a legal requirement for specific industries.
What's it designed to cover?
Payment of your fees
Where possible we want to avoid a claim as much as you do, so if it should arise, we can help settle a dispute between your company and your client regarding unpaid fees. We will pay the fees owed to you if a client refuses to pay and threatens to make a claim.
Reputation and brand protection costs
Our professional indemnity cover will pay for public relations and crisis management costs (including purchasing media space, printing and postage costs etc.) to protect your brand’s reputation in the event of a covered claim.
Intellectual property infringement
Accidental breaches of copyright are becoming more common for fast-growing companies in a saturated digital landscape. We pay up to £25,000 in legal costs to defend your business against others should it happen to you.
Professional credibility
Having professional indemnity cover means that your clients can maintain complete trust in your professional services, knowing that both parties are financially covered if an issue arises.
Claims examples
There are various different types of professional indemnity claims that can affect different industries, but here are a few examples of claims where the business could be liable:
Copyright infringement
As a graphic designer, you incorporate a design element which another artist claims is a copy of their work and they sue you.
Flawed reporting
A surveyor produces a flawed report for a property developer and is sued for the costs of rectifying the architectural drawings and the delay in construction.
Breach of confidentiality
A consultant accidentally passes on unencrypted confidential information from a client and the client’s financial records are compromised or exposed.
Loss of data
An IT consultant fails to properly back up important information resulting in an irretrievable loss of the client’s data, damaging the company.
FAQs
What is professional indemnity insurance?
Professional indemnity insurance is a type of business insurance that provides cover for legal and compensation costs associated with a business's failure to meet contractual obligations with client(s). Learn more about what this type of cover involves.
What does professional indemnity insurance cover?
Professional indemnity insurance covers compensation and legal costs that arise from claims concerning a business's contracts with clients.
For example, a claim made against the business by a client, due to financial losses caused by the business's failure to fulfil a contract in time; or due to mistakes made while carrying out the work.
Who needs professional indemnity insurance?
All businesses that enter into contracts with other businesses or third parties in general should consider professional indemnity insurance. While it's not a legal obligation, clients will often require it and for professional and trade bodies, it's sometimes an eligibility requirement for membership.
How much professional indemnity insurance do I need?
The level of professional indemnity cover you need depends on the details of contracts your businesses enters into. You can learn more about which businesses need what kind of PI cover.
What is the difference between professional indemnity and public liability insurance?
The difference between professional indemnity insurance and public liability insurance is that professional indemnity insurance is relevant to claims concerning your contracts (e.g. mistakes or negligence) and public liability insurance concerns claims against you by members of the public, for injury or property damage due to your work.
Is professional indemnity insurance required by law?
Professional indemnity insurance is not a legal requirement for businesses in the UK. However, it is sometimes a requirement of clients or of professional membership or trade bodies.
Is professional indemnity insurance tax deductible?
Yes. Professional indemnity insurance is an 'allowable expense', which means that it's tax deductible in the UK.
What to look for in a professional indemnity policy
What you need from your professional indemnity policy will depend on the type of business you run. Professional consultants may have to make use of their professional indemnity insurance for providing misleading or negligent advice. Similarly, media companies that publish large amounts of content will be covered for copyright infringement and any issues surrounding defamation due to untrue claims being published.
What are the benefits of buying professional indemnity cover by monthly subscription?
By buying your professional indemnity insurance as a monthly subscription, you spread the cost of your cover over the year, as opposed to paying a large lump sum annually, without affecting the overall cost. This can significantly help you to manage your cash flow, especially for small businesses, sole traders or freelancers with an unpredictable turnover.
Paying monthly is also extremely flexible, meaning you can adjust your level of cover month by month if needed, so you only pay for precisely what you need.
Authorised by the FCA
The FCA supervises UK financial services firms to protect consumers. We are directly authorised and regulated by the FCA and our Firm Reference Number is 656459. These details can be confirmed on the Financial Services Register at www.fca.org.uk or by calling the FCA on 0845 606 1234.
A-rated financial strength
Our insurance products are underwritten by Standard & Poor’s A-rated financial strength or higher. This means the underwriter has been independently assessed by the world’s leading credit rating provider and found to have a strong capacity to meet financial commitments (pay claims).
Protected by the FSCS
If you are a business with an annual turnover under £1m, charity with an annual income under £1m, or trust with net assets under £1m, then you will be entitled to compensation from the FSCS in the unlikely event we cannot meet our obligations. Full details and further information on the scheme are available at www.fscs.org.uk.